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Key Points

A new report urges India's tyre industry to invest heavily in R&D and diversify into non-US markets. This comes after the US administration doubled tariffs on Indian tyre imports to 50%, creating significant headwinds for exporters. The US represents the largest export market for Indian tyres, accounting for nearly one-fifth of all shipments. Without strategic diversification and policy support, India risks losing its competitive position to Asian peers with better trade terms.

Key Points: India Tyre Industry Urged to Diversify Markets After US Tariff Hike

  • US doubled tariffs on Indian tyres to 50%, effective from August 27
  • US is largest market for Indian tyres, accounting for 18% of shipments
  • Asian peers like Japan and Vietnam enjoy lower duty access to US
  • Manufacturers with high US export exposure will feel sharpest near-term impact
2 min read

Increase R&D in tyre manufacturing, diversify into non-US markets to counter US tariffs: Report

CareEdge Ratings report advises Indian tyre makers to boost R&D and expand into non-US markets to counter new 50% US tariffs threatening $1.8B exports.

"Timely policy interventions such as strengthening export incentives, enabling enhanced R&D support, and advancing manufacturing capabilities are critical - Sahil Goyal, CareEdge Ratings"

New Delhi, Sep 3

India’s tyre industry should lower raw material dependence by investing in R&D and accelerate expansion into non-US markets to counter US tariffs, a report said on Wednesday.

New Delhi, Sep 3 (IANS) India’s tyre industry should lower raw material dependence by investing in R&D and accelerate expansion into non-US markets to counter US tariffs, a report said on Wednesday. While the sector has built strong global scale and competitiveness, the recent escalation of US tariffs poses a significant headwind, a report from CareEdge Ratings said.

The US administration has doubled tariffs on Indian imports from August 27 with new tariffs set at 50 per cent for most categories and 25 per cent for specified goods.

To remain competitive, players will need to balance market diversification with cost optimisation, supported by timely policy interventions.

"Timely policy interventions such as strengthening export incentives, enabling enhanced R&D support, and advancing manufacturing capabilities are critical to safeguard India’s global market position and ensure long-term competitiveness,” said Sahil Goyal, Assistant Director CareEdge Ratings.

The US is the largest market for Indian tyres, accounting for 18 per cent of shipments, according to CareEdge Ratings. Unlike India, several Asian peers, such as Japan, Vietnam, and Indonesia face lower duty access, thus eroding India’s relative cost competitiveness in a key export market.

The ratings agency pointed out that in the near term, tyre manufacturers with a high export exposure to the US will feel the sharpest impact of the new tariffs.

US President Donald Trump on September 3 reiterated his complaints against India’s trade practices, calling the India-US relationship “one-sided for many years” and pointing to high tariffs as a barrier to American exports.

He once again pressed his allegation that India’s tariffs on US exports are “about the highest in the world.

According to the World Trade Organisation (WTO) and World Bank data, India does not have the highest tariffs in the world. However, it imposes high levies in specific sectors such as agriculture to protect its farmers.

- IANS

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Reader Comments

P
Priya S
R&D investment is crucial but our companies need government support. Other countries provide massive subsidies to their industries. Why can't we? This is about protecting Indian jobs and exports.
A
Aman W
Trump calling our tariffs high is rich coming from someone who just imposed 50% tariffs on our products! This is pure protectionism disguised as trade fairness.
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Sarah B
While I understand the need to protect farmers, maybe we should reconsider some of our high tariffs. Reciprocal trade relationships could benefit both countries in the long run.
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Vikram M
Our tyre industry is world-class. Instead of complaining about US tariffs, we should focus on making products so good that customers will pay the premium. Quality over quantity!
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Nisha Z
This is a wake-up call for Indian manufacturing. We need to innovate and reduce dependency on any single market. ASEAN, Middle East, Africa - so many opportunities waiting! 🇮🇳

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